"BENEFITS" 1. Coordinate strategy for managing the immediate and long-term needs
2. synthesize the information provided by various financail specialists and determine best course of action
3. Serve as a liaison between clients and other financial planners

Financial planner should not solicit clients through false or misleading communications or advertisements

Describe the Code of Ethics and Professional Responsibility: Rule 102

should not engage in any conduct that involves dishonesty, fraud, deceit, or misrepresentation

Describe the Code of Ethics and Professional Responsibility: Rule 103

1. acting in accordance with the authority set forth in the governing legal instrument
2. identifying and maintaining records of funds and other property held by a client
3. delivering any funds or other property to which a client is entitled.
4. not commingling client funds with designee's own personal property
5. Showing care required of a fiduciary

Describe the Code of Ethics and Professional Responsibility: Rule 403

Rule 403 states that a financial planner must disclose in writing, before the client relationship is established, an relationships that could reasonably compromise the financial planner's objectivity or independence.

Describe the Code of Ethics and Professional Responsibility: Rule 404

Rule 404 states that if a conflict of interest should develop during the course of the financial planning process, the financial planner should immediately disclose conflicts.

Describe the Code of Ethics and Professional Responsibility: Rule 405

Rule 405 states that the disclosure of compensation must be made annually to ongoing clients. This means offering clients a current copy of the Securities and Exchange Commission Form ADV, Part II, or all of the disclosure information described in Rule 402.

Describe the financial planning process: setp Three

Assess the client's current financial status

Describe the Code of Ethics and Professional Responsibility: Rule 401

Rule 401 requires that a financial planner disclose to the client any important material information, including conflicts of interest, changes in business affiliation, address, telephone number, credentials, qualifications, licenses, compensation structure and agency relationships

Describe the Code of Ethics and Professional Responsibility terminology: Fee-only

The term fee-only refers to a method of compensation in which compensation is received only from the client, and there is not compensation that depends on the purchase or sale of any financial product

Describe the Code of Ethics and Professional Responsibility terminology: Financial planning engagement.

A financial planning engagement is said to exist when a client is relying on the information or services provided by a CFP designee using the financial planning process

Describe the Code of Ethics and Professional Responsibility terminology: personal financial planning

Personal financial planning refers to the process of determining the proper means for an individual to achieve his or her financial goals through the financial planning process

Must evaluate the needs of the client, explain complicated financial concepts, analyze the financial circumstances of the client, prepare financial plans, clarify client goals, and finally, implement and monitor the financial plan.

Describe the financial planning process: client

Making known his or her goals and objectives, for being receptive to creative financial plans, and for working to advance the agreed-upon plan.

Describe the financial planning process: other advisers

To assit in the financial planning process and are responsible for fulfilling whatever their particular task may be as designated by the financial planner with the approval of the client.

Describe the code of Ethics and Professional Responsibility: Rules 411

Rule 411 states that the CFP designee must advise his or her employer about any outside affiliations that may reasonably compromise his or her service to an employer

Describe the code of Ethics and Professional Responsibility: Rules 412

Rule 412 states that a CFP Board designee must act in good faith with partners

Describe the code of Ethics and Professional Responsibility: Rules 413

Rule 413 states that a CFP Board designee must disclose to his or her partners all relevant and material information regarding credentials, competence, experience, licensing, legal status, adn financial stability

Describe the Code of Ethics and Professinal Responsility: Rule 501

Rule 501 states that a financial planner should not reveal, without the client's consent, any personally identifiable information relating to the client relationship.

Describe the financial planning process: step one.

First step:establish client-planner relationship.
Second step: disclose his or her rate of compensation.
Step three: work together to outline the responsibilities that each party will bear.
Step four: Two parties may decide on the duration of the agreement.
Step five: Client and financial planner should provide whatever further information is necessary to adequately define or limit the work to come.

Describe the Code of Ethics and Professional Responsibility: Rule 604

Rule 604 states that a financial planner must inform the appropriate regulatory and/or professional disciplinary ody when there is any unprofessional, fradulent, or illegal conduct by another CFP Board designee or another financial professional

Describe the Code of Ethics and Professional Responsibility: Rule 605

Rule 605 states that a financial planner must disclose illegal conduct the the supervisor and/or partners if illegal conduct is suspected

Describe the Code of Ethics and Professional Responsibility: Rule 606

Rule 606 states that a financial planner must perform his or her services in accordance with all applicable laws, rules, and regulations of governmental agencies and other applicable authorities

Describe the Code of Ethics and Professional Responsibility: Rule 502

Rule 502 of the Code of Ethics states that a CFP Board Designee must maintain the same standards of confidentiality to employers as clients

Describe the Code of Ethics and Professional Responsibility: Rule 503

Rule 503 states that a financial planner must adhere to reasonable expectations of confidentiality while in business and thereafter

Describe the Code of Ethics and Professional Responsibility: Rule 601

Rule 601 states that a financial planner must use the marks in compliance with the rules and regulations of the CFP Board

Describe the Code of Ethics and Professional Responsibility: Rule 602

Rule 602 states that a CFP Board designee must show respect for other financial planning professionals and related occupational groups by engaging in fair and honorable competitive practices

Describe the Code of Ethics and Professional Responsibility: Rule 603

Rule 603 states that a financial planner must inform the CFP Board when another CFP designee has undoubtedly committed a violation of the Code of Ethics

Describe the Code of Ethics and Professional Responsibility: Rule 414

Rule 414 of the Code of Ethics states that a CFP Board designee who is a partner or co-owner of a financial services firm must withdraw in compliance with any applicable agreement and in fair and equitable manner

Describe the Code of Ethics and Professional Responsibility: Rule 415

Rule 415 states that a CFP Board designee must disclose to an employer any compensation or other benefits arrangements in connection with his or her services to clients that are in addition to compensation from the employer.

Describe the Code of Ethics and Professional Responsibility: Rule 416

Rule 416 states that is a CFP Board designee enters into a business transaction with a client, the transaction shall be on terms that are fair and reasonable to the client

Describe the Code of Ethics and Professional Responsibility: Rule 406

Rule 406 states that the compensation of a financial planner should be fair and reasonable

Describe the Code of Ethics and Professional Responsibility: Rule 407

Rule 407 states that references may be provided that include recommendations from present or former clients

Describe the Code of Ethics and Professional Responsibility: Rule 408

Rule 408 states that the scope of authority of a financial planner must be clearly defined and properly documented

Describe the Code of Ethics and Professional Responsibility: Rule 409

Rule 409 states that all CFP Board designees are obliged to adhere to the same standards of disclosure and service

Describe the Financial Planning Practice Standards: 100 series

Is about establishing and defining a relationship with a client. States that the scope of the engagement should be defined before any financial planning service is provided.

Describe the Financial Planning Practice Standards: 200 series

Is about gathering client data. 200-1 Involves detemining a client's personal and financial goals, needs, and priorities before making or implementing any recommendations. 200-2 states financial planner must obtain quantitative information and documents before making or implementing any recommendations. If such information is not obtained, the engagement should be limited or terminated.

Describe the Financial Planning Practice Standards: 500 series and enforcement

500-1 states the fiancial planner and the client should agree on the implementation responsibilites.
500-2 states they should select products and services for implementation.

Describe the Financial Planning Practice Standards:
600 series and enforcement

600-1 states the financial planner and client must mutually define monitoring responsibilites.

Describe the Cash flow statement.

A cash flow statement shows where an individual's financial resources are going. The net cash flow is the total income minus the total expenses.

Describe the Code of Ethics and Professional Responsibility: Rule 410

Rule 410 states that a financial planner must perform his or her professional services with strict dedication to the lawful objectives of the employer and in accordance with the Code of Ethics

Describe the Code of Ethics and Professional Responsibility: Rule 610

Rule 610 states that a finacial planner must return the client's original records in a timely manner whenever the client should request them.

Describe the Code of Ethics and Professional Responsibility: Rule 611

Rule 611 of the Code of Ethics states a financial planner should not bring or threaten to bring a disciplinary proceeding under the Code of Ethics or report or threaten to report information to the CFP Board pursuant to Rules 603 and/or 604 for no substantial purpose other than to harass, embarrass, and/or unfailry burden another CFP Board designee

Describe the Code of Ethics and Professional Responsibility: Rule 612

Rule 612 states that a financial planner should comply with all applicable renewal requirements that have been established by the CFP Board

Describe the Disciplinary Rules and Procedures: Board of Professional Review

The Board of Professional Review is charged with investigating, evalutating, and taking whatever action is appropriate when violations of the Code of Ethics are alleged to have occurred. The Board can be divided into two panels, Inquiry Panel and Hearing Panel

Describe the Balance Sheet (statement of financial position).

A balance sheet is basically a freeze-frame of an individual's wealth at a particular time. There are three categories on a balance sheet: assessts, liablities, and net worth.

Describe the Financial Planning Practice Standards: 300 series

300-1 states that a financial planner should anaylze in order to understand the client's financial situation and to determine how the client's goals can be met.

Describe the Financial Planning Practice Standards: 400 series

400-1 states that a financial planner should identify and evaluate the financial planning alternatives that can acheive the client's goals, needs, and priorites.
400-2 states that the financial planner should develop his recommendations from this set of alternatives.
400-3 states the FP should present his recommendations to the client.

The standards are designed to set the level of professional practice that is required of a CFP designee engaged in personal financial planning. There are ten standards.

Describe the Pro forma statement.

It forecasts future balance sheets and cash flow statements. Best way is to conside three scenarious: worst-case, average-case, and best case.

Describe the Disciplinary Rule and Procedures: Staff Counsel

The staff counsel maintians a central office for the filling of requests for the investigation of CFP Board designee conduct, for the coordination of investigations, for the enforcement of disciplinary enforcement proceedings.

Describe the Disciplinary Rule and Procedures: grounds for discipline

individuals may be subject to discipline any time they commit an act that violates the code of ethics, act that does not comply with practice standards, violates criminal law, failure to respond to a board request, or making a misleading statement to the board

Describe the Code of Ethics and Professional Responsibility: Rule 701

Rule 701 states that a financial planner should provide services diligently

Describe the Code of Ethics and Professional Responsibility: Rule 702

Rule 702 states that a finacial planner should enter into an engagement only after securing sufficient information to satisfy him or herself that the relationship is warranted by the client's nees and objectives; and the designee has the ability to provide competent service or to involve professionals who can.

Describe the Code of Ethics and Professional Responsibility: Rule 703

Rule 703 states that a financial planner should implement only those recommendations that are suitable for the client

Describe the Budgeting: discretionary vs. nondiscretionary

Discretionary- can be changed or timed depending on convenience.
Nondiscretionary (fixed)- can be changed somewhat, but must be paid at some time.

Describe the savings strategies.

One-setting goals, realistic and known to all parties.
Two-Take saved money and devote to special purchase.

Describe the Budgeting: financing strategies.

One- consolidate credit card or student loan debt.
Two- cash-out refinance, like a home equity loan.
Three- cash value of life insurance policy for a loan
Four- Tapping into company savings plan
Five- Use the after-tax money from Roth IRA

Describe the Code of Ethics and Professional Responsibility: Rule 704

Rule 704 states that a financial planner should make a reasonable investigation regarding the financial products recommended to clients

Describe the Code of Ethics and Professional Responsibility: Rule 705

Rule 705 states that a financial planner should supervise subordinates with regard to their delivery of financial planning services

Describe the Code of Ethics and Professional Responsibility: Rule 607

Rule 607 states that a financial planner must not engage in any conduct that reflects adversely on the profession

Describe the Code of Ethics and Professional Responsibility: Rule 608

Rule 608 states that a financial planner must disclose to clients the firm's status as a registered investment advisers.

Describe the Code of Ethics and Professional Responsibility: Rule 609

Rule 609 states that a CFP Board designee must not practice any other profession or offer to provide such services unless the CFP Board designee is qualified to practice in those fields and is licensed as required by state law

Describe the Disciplinary Rules and Procedures: forms of discipline

1. comlete additional education
2. privately censure
3. issue a public letter of admonition
4. suspended for a lenght of time
5. permanently revoke the license

Describe the Disciplinary Rules and Procedures: investigation

When allegations are made and an investigation is begun, the designee has 20 calendar days from the notice of the investigation to file a written response to the board.

Describe the emergency fund planning.

Three to six months of monthly expenses.

Describe the credit and debt management: Consumer debt.

Should never be greater than 20% of income

Describe the credit and debt management: mortage payments.

Should be no more than 28% of the owner's gross income.

Describe the credit and debt management: all debts.

Should never be more than 38% of gross monthly income.

Describe the credit and debt management: renter's expenses.

Should always be less than or equal to 30% of his gross monthly income.

Describe Chapter 11 Bankruptcy

In Chapter 11 Bankruptcy, the person, firm, or corporation is allowed to reorganize in order to meet the obligations of debt. After this is done, the court will either confirm or reject the plan of reorganization. Typically, the debtor will remain in possession of his or her assets and will continue to operate the business, though these operations may be subject to the oversight of the court

Describe Chapter 13 Bankruptcy

In Chapter 13 Bankruptcy, an individual is allowed to set up a repayment plan. The debtor is allowed to hold on to his or her property as long as he or she makes regular payments

Describe the Fair Credit Reporting Act

The Fair Credit Reporting Act asserts that consumers have the right to see their own files and request corrections made. Information cannot be provided unless the recipient has a purpose specified in the Act. Also the governement must have a specified reason to see a file

What precentage of an individual's gross income should go into savings and investments?

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